The Value Added Tax (VAT) Service has set up a special unit to ensure the effective collection of the communications service tax (CST) throughout the country. The unit which will operate alongside the fraud detection unit of the service is to ensure that none of the communications service providers under-declare their earnings. The service has warned that any of the companies caught "playing smart" will be made to face the full rigours of the law. The Head of Public Affairs and Information Unit of the VAT Service, Mrs Florence Asante, told the Daily Graphic that the new unit had been fully resourced and had IT experts who could easily detect any fraudulent attempt by any of the operators to under-declare their earnings for each month. The CST is a tax levied on charges for the use of communications services provided by communications service operators as per Section (1) of the CST Act of 2008, which came into force on June 1, 2008. Under the Act, national fixed network and mobile cellular network operators, Internet Service Providers and providers of free-on-air and pay-per-view television services, all classified under Class 1 License holders by the National Communications Authority (NCA) are to charge the tax from consumers. There will be a GH¢2,000 spot penalty if a licensed business did not make any returns after the last prescribed day of making returns on the tax. Moreover, an interest of 150 per cent of the prevailing commercial bank rate would be charged on the tax collected. Mrs Asante said once the law came into force from June 1, the service would collect the VAT accordingly right from that date. Reacting to reports that some of the cellular phone service providers had not started charging, she said "that is not our concern, because we are going to deduct the VAT as per the law". Mrs, Asante said there would be no compromises, because the business of the service is to collect the VAT, effective June 1. She said the operators were in competition and may not openly say whether they had started collecting or not, and indicated that it was not the business of the service to know about that. "What is expected of us is to charge six per cent on every service rendered at a time, and that is explicitly stated in the law," Mrs Asante noted. Source: Daily Graphic